The extra buying power that comes with surprisingly low mortgage rates has increased the lifestyle choices open to many first-time home purchasers. This is an especially promising yet nerve-racking period for those who’ve long hankered to own a brand-new home.
“Buyers are very excited, but somewhat anxious because new home market inventory is tight now,” says Sheryl Palmer, the CEO of Taylor Morrison (taylormorrison.com), a nationwide home-building firm based in Arizona.
Of course, given the high rate of joblessness across America, many whose finances have been hurt by COVID-19 can’t possibly consider a home purchase at this point in time. But others with secure jobs, sufficient savings and sound credit can finally fulfill their home-buying aspirations. In one of the bright spots in the current recessionary economy, sales of newly built homes this June increased to their highest level since 2008.
“Along with rising builder sentiment, we are seeing increasing consumer demand in the suburbs, exurbs and rural areas,” says Robert Dietz, chief economist for the National Association of Home Builders (nahb.org).
Given that many young adults are now allowed to work remotely due to the pandemic, Palmer says an increasing number of buyers anticipate that in the future, even after the outbreak is over, they’ll spend more working hours at home. This makes them somewhat less concerned about the commuting time between their residence and their workplace. For that reason, many are more willing to consider a house in an outlying suburb, where they can get more space for the money than they could close to a city center.
Among the major draws for suburban buyers are access to public parks and outdoor exercise areas, including hiker-biker trails.
“Buyers want big lots and open space so their kids can be healthier outside,” Palmer says.
Those who’ve been living through the pandemic in space-constrained apartments are particularly motivated to live in large homes surrounded by greenery. Due to low mortgage rates, Palmer says some renters planning a first purchase can now qualify for the equivalent of a trade-up property.
Taylor Morrison does extensive research on buyer preferences, and recent surveys show pandemic-era purchasers are very interested in what the company calls “healthy house living.”
“Consumers are consciously aware of the health benefits and perceived risks in virtually every environment they’re entering today -- stores, schools, planes -- so naturally they’re just as tuned in to the health benefits of their homes,” according to Palmer.
To address these concerns, some homebuilders, among them Taylor Morrison, are embedding wellness features into all their new construction at no extra cost to buyers. These include whole-house filtration systems, high-tech thermostats and antibacterial bathroom fans.
But beyond such automatic built-ins, income-constrained young adults planning a new home purchase typically confront multiple trade-offs. For example, they might need to decide if they’d rather spend their extra dollars on glitzy kitchen features or on more square footage.
Though every such decision is ultimately personal, Palmer reminds buyers that it’s less costly to add square footage when a home is first constructed than to build it on later.
“You can always go in and replace your kitchen countertops or appliances in the future. But improvements to the structure will be more expensive later,” she says.
Here are a few other pointers for new home buyers:
-- Try to capture your ideal lifestyle in words.
Where and how you choose to live has countless implications, says Doro Kiley, a certified life coach who’s helped many clients navigate real estate transitions. She urges clients to make a home choice within the context of their overall life plans.
“Always begin by thinking about the end product -- what you’d really like as opposed to what you would settle for,” Kiley says.
She recommends that couples planning a home purchase first write down their respective visions of a dream house, including both location and home features. They should then share their visions, combining the key elements of both into a single statement.
Written statements help people clarify their thinking and refine the details of their plans, as they move through successive drafts. They’re also a way to help reconcile differing views.
-- Don’t hurry the selection of a property.
Merrill Ottwein, a longtime real estate broker and past president of the National Association of Exclusive Buyer Agents (naeba.org), says these days competition among those aspiring to buy a brand-new home in popular neighborhoods is often fierce. That’s why some buyers feel pressure to act too quickly, lest they lose out to a rival.
“With so much at stake, it’s a horrible idea to buy any house before you’re really ready. Don’t let your competitive instincts trick you into the wrong choice,” Ottwein says.
(To contact Ellen James Martin, email her at email@example.com.)